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BW Businessworld

‘Integrity, Ethics & Values Are Needed More Today Than Ever’

In an exclusive interview with BW Businessworld editor-in-chief Anurag Batra, Robert S. Kaplan enunciates how the leaders of today at both political and organisational levels can create inclusive growth and also reimagine capitalism in the 21st century India

Photo Credit : Ritesh Sharma

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Aproponent of ethical leadership with strong moral values based on the foundation of good behaviour,connection, and commitment to the society, world renowned expert Robert S. Kaplan, emeritus professor at the Harvard Business School and co-creator of the Balanced Scorecard, is an American accounting academic who strongly believes that inclusive growth is the key to building better businesses and societies. In an exclusive tête-à-tête with BW Businessworld editor-in-chief Anurag Batra, Kaplan enunciates how the leaders of today at both political and organisational levels can create inclusive growth and also reimagine capitalism in the 21st century India. Edited excerpts:

In your opinion, what does it take for a leader to survive and thrive in today’s VUCA (volatile, uncertain, complex and ambiguous) world?
There are several attributes that remain important as we transition from the old world to the current. One is ethical leadership, that is to have strong moral values that need to be communicated to the organisations by the leaders who want to make sure whatever they do is based on the foundation of good behaviour, connection, and commitment to the society. The best leaders are those who continually challenge and inspire organisations to be and do better. Hence, integrity, ethics and values have more relevance and need today than ever.

Since your work is primarily focussed on organisations and creating relevant leadership frameworks, what trends do you predict in the next three to five years?

The biggest trend that I also foresee as a potent challenge as well as an opportunity is, how well can corporations align themselves with some of the societal problems that have proven intractable. For long,  businesses are attributed with the relevance of being successful and making profits only, and that they should not get distracted by things such as taking care of education, health and ensuring income growth of the population, which is the responsibility of the government. But, in the past 50 years, a magnificent change has come about where the success of capitalistic enterprises has lifted people out of poverty.

The socialist tendencies have been abandoned by countries such as India and China. While some people scaled the heights, others were made worse off owing to factors such as globalisation and exclusive growth. Thus, you cannot really understand the 2016 outcome of the Presidential elections in the US, without realising it as a reaction against globalisation that left a significant number of people behind. The populist leaders enjoy the favour and support of the people who cannot participate and reap the benefits of the growth process of a country. These leaders who promise to transfer the wealth to them and make them better off, enjoy their vote and support, and that is not a good situation for the corporations. The recent Trump election and the Brexit vote are warning signs that inclusive growth is the key to a politically and economically stable society and nation. That populism is not good for corporations, hence, they need to engage with civil society and try to use their engine for growth and prosperity to address the people who have been left behind. So, in my opinion, this is the biggest challenge for the corporations as they do not see this as one of their primary missions.

Is it because the leaders are arrogant or because somewhere in the pursuit of profit everything else has become secondary for them?

Yes, the leaders traditionally see their roles as delivering shareholder value, which though is their primary constituency, but if they are to target sustainable growth and profits for their shareholders over long term, they need to engage with the civil society and play a significant role in reducing poverty and inequality in the society.

What is your impression of India? Are we keeping pace with what is happening in the world?
One of the most remarkable differences I noticed during my visits to India is that it is getting infrastructure. There are more high rises and airports than before. The infrastructure deficit in India compared to other developing nations is starting to get narrow. The other important opportunity that has come its way, is the election of Narendra Modi as the Prime Minister; he is business-friendly and growth-oriented. This is a good opportunity for all corporations in India to flourish, lift more citizens out of poverty, and aim for inclusive growth.

India vis-à-vis China...
India and China are complete contrasts. India is a bit messier as it is a democracy, while China can take quick decisions centrally. It can build high rises and roads  swiftly as it is not saddled with red-tape and bureaucracy, like India. However, India can be more vibrant and creative. It is strong on services, while China is on manufacturing owing to its robust infrastructure. Perhaps, as the infrastructure in India improves, the country will become a better base for manufacturing too.

What is your advice to political and organisational leaders in context of refraining from devising populist measures and doing their bit for the greater good of communities?
A populist leader is someone who appears to the basic concerns and fears of the people who have been disenfranchised from growth. Organisations need to come with a new framework where they should not just be adopting communities, but find ways to productively employ people in these communities as their employees, as potential customers for their products or encourage them to become entrepreneurs and suppliers to them. This means the organisations need to collaborate with the leaders in those communities where they are established and work to build new ecosystems. Though India has a great leader like Modi on top, the real work must be done at the grassroot level in states and localities with the support of a positive and inclined national government. The window is open, and it is up to  organisations to start engaging and reimagine capitalism in the 21st century for inclusive growth that is protective of the environment and alleviates inequality that has occurred where some people grew a lot, while others were left behind.